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Parson - Chp 2 Exploring the World of Buisness

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Free Enterprise System   A country where people are free to produce the goods and services they chose.  
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Profit   A buisness that earns more money than they spend.  
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Loss   A business that spends more money than they earn.  
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Entrepreneurs   transform ideas for products or services into real-world business.  
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Capital   Money supplied by investors, banks, or owners, of a business.  
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Service business   A company that provides a service for a fee.  
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Merchandising business   a company that buys finished products and resells them to individuals or other businesses  
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Manufacturing business   a company that buys raw materials, such as wood or iron ore, and transforms them into finished products through the use of labor and capital.  
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Sole Proprietorship   a business owned by one person  
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Partnership   a business owned by two or more persons.  
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Corporation   a business organization that is recognized by law to have a life of its own.  
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Charter   Legal permission given to a corporation that gives it certan rights and privileges. It spells out the rules under which the corporation is to operate.  
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Accounting System   A system designed to collect, document, and report on financial transactions affecting the business.  
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Manual Accounting System   Accounting information which is processed by hand.  
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Computerized Accounting System   the financial information is recorded by entering it into a computer.  
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Genneral Accepted Accounting Principles   Accounting principles used by all accountants  
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Financial Reports   Summarized information about the financial status of a business  
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Financial Accounting   Reporting information to external users  
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Management Accounting   Reporting information to internal users.  
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Business Entity   Accounting assumption that says that a company exists independently of its owners personal holdings.  
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Accounting Period   a period of time covered by an accounting report.  
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Going Concern   An assumption that the business will continue to operate unless it is clear that it cannot survive.  
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Created by: yparson
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